Automakers: ‘No thanks’ to deregulation

David Fickling

Bloomberg.com

Four of the world’s biggest automakers have dealt “a significant blow to Washington’s attempt to roll back” Obama-era fuel-economy rules, said David Fickling. Last week, Ford, Honda, Volkswagen, and BMW struck a deal with California that requires tighter fuel economy standards, closer to Obama administration rules than the lenient regulations proposed by President Trump. Additional states representing a third of the U.S. car market tend to follow California’s standards, so more companies are likely to join in. Two decades ago, U.S. regulations “could more or less define the shape of the world’s car market.” But that has been changing. Japan, Canada, Europe, and even China have all been upgrading their standards “to reduce the toll of vehicle pollution.” The proposal from Trump’s Environmental Protection Agency would make the U.S. the odd one out. Carmakers now depend on “unified platforms and modular designs” to sell their vehicles worldwide. They want to minimize the complexity of their global supply chains and can’t afford to make “bespoke vehicles for each market.” Maybe 20 years ago Washington could have successfully managed to “grab hold of the industry’s steering wheel.” But these days, the U.S. alone just isn’t significant enough for the car companies to change course.